Los Angeles Cannabis Regulation Could Save Millions on Regulation

With the legalization of recreational marijuana, California faces the daunting task of implementing a regulatory scheme on a scale rarely seen before. There have been few – if any – periods in state history in which an entire industry must be legalized and regulated within a narrow window of fourteen months. And yet that is the task faced by the State come January 2, 2018.

In the midst of feverish work and complicated legal structures, the City of Los Angeles is garnering worldwide interest in the efficacy of its new cannabis regulations. Learn more about the system that could save taxpayers millions of dollars in regulatory costs and ensure a smooth transition into legal sales of recreational marijuana.

The L.A. Plan

According to Forbes, Los Angeles voters overwhelmingly passed Proposition M in March 2017. The legislation, which was carefully crafted with input and support from the cannabis industry, utilizes a four-pronged approach to create enforceable and stable regulations for the cannabis industry. First, it emphasizes sensible regulation which addresses the realities of the cannabis industry. This became a priority after advocates witnessed the “disaster” of the old Prop D, which ineffectively regulated medical marijuana without meeting the needs of the industry. Second, Prop M creates a licensing mechanism, enabling cannabis entrepreneurs to obtain physical business licenses for the operation and ownership of recreational cannabis businesses. Third, the legislation takes a pragmatic approach to the taxation of cannabis operations. Business taxes – currently the lowest in the nation at 1% to 2% – will be gradually raised to more sustainable rates. At the same time, taxes for marijuana collectives will be slightly lowered from 6% to 5%, in order to level the competitive playing field with marijuana cultivators and distributors. And finally, the fourth prong of Proposition M focuses on enforcement, which is made easier and more cost-effective by clear guidelines in the other provisions of Proposition M.

Why Proposition M is Making a Splash

The highly researched and developed legislation is getting attention worldwide, as other states and nations consider the best regulatory mechanisms for marijuana businesses. The Southern California Coalition reports that it has received inquiries from legislators across the United States and North America, and even Europe.

In developing the mechanisms of Proposition M, enforcement was specifically designed as the last element and legislative priority. This is because effective enforcement can only be made after clear laws are in place. Federal, state, and local law enforcement agencies have spent billions of dollars in recent decades in an attempt to enforce marijuana laws. Unfortunately, because the laws are unclear, these resources are often wasted entirely. Cases are dismissed because of conflicts between state and federal law. Confusing technicalities make it difficult for officers to know whom to arrest and what evidence to seize. Prosecutors and defense attorneys argue over these legal technicalities in court, effectively wasting more taxpayers dollars on unclear regulations. All of these problems could be avoided by having clear guidelines to enforce without the need for excessive or wasted police raids or endless court battles. An experienced Los Angeles cannabis business licensing lawyer can help business owners ensure they are in compliance with all federal, state and local regulations.

The Los Angeles Cannabis Law Group represents growers, dispensaries, collectives, patients and those facing marijuana charges. Call us at 714-937- 2050.